The impact of capital structure on firm performance in Malaysia / Azriena Fadzlin Hamzah

The main objective of this study is to examine "The Impact of Capital Structure on Firm Performance in Malaysia". From this study, profitability ratio measured by return on asset (ROA) of the company acted as the dependent variable, whereas other five factors contributing on the firm performance are short term debt, long term debt, size, sales growth and efficiency acted as the independent variable. This study covers two sectors in Malaysian equity market which are consumers and industrial sectors. The data was analyzed using panel data and this project paper had been tested for several numbers of tests. The two sectors selected firms for this study are Pensonic Holdings Berhad, Poh Kong Holdings Berhad, Bonia Corporation Berhad, Goldis Berhad, Jaycorp Berhad, Pelikan Intemational Corporation Berhad categorized as consumer sector, Prestar Resources Berhad, Top Glove Corporation Bhd, Kian Joo Can Factory Berhad, Ajiya Berhad, Three-A Resources Berhad, DRB-Hicom Berhad categorized as industrial sector. As the results contribute in the defining of STD, LTD, GROWTHS and EFFICIENCY have a significant relation with ROA. However, the results founds that SIZE is not significant to ROA. Moreover, even though there is significant among the variables, the adjusted R-squared in this research shows a weak goodness of fit. It indicates a small contribution of impact towards ROA